Asset Sharing Model
The big problem when buying expensive equipment and hardware is whether the customer will be able to use the equipment on a full scale. This is where the idea of asset sharing comes into play.
We already see this IoT business model in car- or bike-sharing companies. Think about it this way: why should I pay the total price for a vehicle if it is parked outside my house 90% of the time? Can I just pay for the number of cars I use?
The Internet of Things can solve this problem, and we have already started to see IoT solutions embedded in autonomous vehicles, shared drones, virtual power plants, etc.
This IoT business model is based on selling your extra capacity back to the market. The goal is to maximize the use of your IoT product by multiple clients. This way, each customer pays a reduced price and you can get to market faster than having one customer pay for your entire product.
One of our clients uses this IoT business model when deploying smart batteries for commercial buildings. The batteries provide energy to the building, and in case of extra capacity, the energy is sold back to the electric grid.
In this particular case, the batteries are a shared asset between the building and the electric grid.
Asset tracking model
Connected devices in the supply chain help businesses identify, control and track assets in real-time. This helps them protect field assets from loss or theft while monitoring for maintenance purposes. With the data generated by connected devices, businesses can regularly check their status and know when to fix or replace assets before they fail. This business model can also track the supply chain to identify inefficiencies, streamline workflows, and improve usage transparency.
One of our clients – a global manufacturer of smart and rugged devices – turned to rinf.tech for building an IoT device solution and a tablet application to identify water leakage in water pipe areas of the fields.
Using our custom-built IoT solution, a technician can walk along the water pipes with the tablet pointed to the ground to gather data automatically pushed to the cloud infrastructure and aggregated into a detailed report. The app uses thermal sensors to analyze the ground temperature and record all temperature deviations to find a water leakage area.
This thermal vision solution has eventually helped the client reduce 50% of costs due to the proper and timely water leakage areas detection.
Compliance Model
Compliance monitoring is vital to many industries and requires a lot of time, effort, and money. Significant audits may be required for safety, environmental, or legal reasons depending on the industry. Deploying IoT devices in the field can help reduce compliance costs by allowing your business to respond faster to changes before they become a problem.
The IBM Vegetation Management platform combines weather, satellite and IoT data to help utilities make better decisions. Vegetation-related failures are some of the leading causes of failures worldwide, which affect customer satisfaction and system reliability. Compliance is critical in such a highly regulated industry. The IBM platform helps utilities track assets in real-time and offers up-to-date information to help with
- work planning,
- budget allocation,
- hazard reporting, regulatory reporting, and so on.
Data-Driven Model
The popular IoT business model is a data-driven model based on data generated by your devices. You create an IoT product that provides value to customers and collects data that you can use for other products or sell to a third party. This model works well if you have a lot of data collection devices and as long as you have notified customers that you are using their data.
There are many ways to use this business model beyond the classic online shopping model, where consumers get product suggestions based on their browsing or purchase history. For example, in office buildings, energy-efficient devices can track energy consumption and be used by homeowners to control HVAC systems and energy use throughout the day. This data can also be sold to utilities for forecasting purposes as they manage the local power grid.
The value of the Internet of Things consists in the insights you can generate from the data you collect. The question is, who benefits from these insights?
Think about companies like Facebook or LinkedIn. They collect a huge amount of data from all of us, often for free. While they provide us, the user, with value for providing this data, the real value is provided to advertisers and other third-party companies who use the data to promote their products and services.
In this case, LinkedIn or Facebook are data collection tools to help advertisers streamline and improve their digital campaigns. That’s how they make money.
The same business model works in IoT. You can build your product to provide value to the end-user and collect valuable data that can then be sold to a third party. With this approach, you can offer your IoT device for free to eliminate for users the hassle of purchasing it. The goal is to deploy as many data collection devices as possible. You want to create a network effect. The more devices you have, the more attractive your data value proposition will become to third parties.
There are many examples of products using this IoT business model. Think about energy-efficient devices installed in buildings to control their energy consumption. The building manager benefits from this data, as well as utilities or other aggregators that can pay a hefty sum to get aggregated data from thousands of buildings.
The same is true for devices that monitor your driving habits. They give you some interesting insights, but insurance companies get the most value because they can understand the driving patterns of thousands of people.
This model can be a linear extension of your core business, meaning you can start by meeting your end user’s needs and monetizing their data afterward.
There are many ways to incorporate IoT into your existing business model. A lot of businesses creatively combine the two or more models to diversify their revenue streams and maximize opportunities. We can help you build an achievable connected product roadmap and develop your IoT product from scratch. We invite you to leverage our R&D Embedded/IOT Center, proven expertise, and seasoned software engineering talents for successful IoT software development.